Almost 100 new data centres in the works, adding more than 2 GW of demand by 2030, market update finds

Australia remains on track to more than double the operational capacity of its data centres by 2030, providing both an impetus for new renewable energy demand but also the potential for grid strains if the rollout is not well-managed.

The country is now home to 163 operating data centres with 1.6 gigawatts of capacity, according to the latest Australian data centre forecast report, released by Data Centres Australia on Friday.

That tally, though, will swell by another 97 facilities by 2030, with operational capacity reaching 3.9 GW, the report said, citing data it says is based on project viability rather than announced plans or connection applications.

That capacity prediction is about 20% more than was forecast in DCA’s April report, underscoring the rising expectations surrounding the booming sector.

“Australia is a highly attractive market for sustainable data centre development, with a leading industry ecosystem and attributes such as large-scale renewable energy generation,” said Belinda Dennett, chief executive officer of Data Centres Australia, in an accompanying statement.

“Capacity under construction has doubled since our April report and more capacity has moved from early stage to committed, demonstrating continued demand in the market,” she said.

Data centre activity was a prominent discussion point at this week’s All Energy 2026 conference in Melbourne, with Dennett among the main speakers citing Australia as one of the world’s most attractive destinations for data centres and artificial intelligence investments.

“Australia can lead the world as a benchmark for sustainable data centre development,” Dennett told the conference on Wednesday.

“Our political stability, our systems of law, our skilled workforce, our ‘Five Eyes’ security status, and our time zone and bridges [to] Asia and the US West Coast stand us in good stead,” she said.

“But more than anything, it is our renewable energy potential and our reliable energy market that make us so attractive,” Dennett said, adding a forecast that the world would need an additional 220 GW of compute by 2030.

“If we train and fine-tune AI models here using our renewable energy, the emissions from that compute are up to four times lower than if the same work is done in other regional markets running on fossil fuels,” she said. “We wouldn’t just be building data centres; we’d be exporting green AI to the world.”

Ensuring that additional renewable energy can be brought on fast enough – and in the places in Australia that need it – was the objective of a electricity market rule change proposed this week by climate change and energy minister Chris Bowen.

The proposed change included a provision that, if approved, would grant the Australian Energy Regulator to “turn down” certain data centres if, for instance, they held insufficient firming capacity or contracts at a time when market operators had issued a lack of reserve alert.

In her speech to the All Energy event, Dennett said industry and governments needed to work together to find “a mechanism … that allows us to solve these challenges of grid connection and the demand for more and more energy”.

“It’s essential that we’re going to not only deliver on the opportunity for data centres, but also to deliver the energy transition on time and on budget,” she said.

The data centre update released on Friday showed Melbourne is pulling ahead of Sydney in terms of new projects. The Victorian capacity has 1.2 GW of capacity that has moved from early stage to committed, compared to 700 megawatts in Sydney.

“The analysis shows pronounced growth in the data centre pipeline in Victoria over the last six months, likely attributable to the state government’s efforts to attract investment,” Dennett said.

The report said Sydney’s total pipeline and early stage capacity have dropped by 3.6 GW and 4.4 GW, respectively. The shift was “likely a combined result of Sydney’s announced energy constraints, less certain policy approval timelines and recent policy announcements”, it said.

Actual operational capacity increased just 100 MW since the April edition of the report, while capacity in its “Under Construction” category doubling since then. That increase was evenly split across Sydney and Melbourne, the report said.

“The numbers also reveal a trend for development outside the major hubs of Sydney and Melbourne,” Dennett said.

The total pipeline forecast outside of these two cities had increased from 19% to 31% over a two-year period, the report said.

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